Int ern at ion al Jo u rna l of App lied R es ea rch 2 016 ; 2 (1 0): 01-04
ISSN Print: 2394-7500
ISSN Online: 2394-5869
Impact Factor: 5.2
IJAR 2016; 2(10): 01-04
www.allresearchjournal.com
Received: 01-08-2016
Accepted: 02-09-2016
Sreeja ES
Guest Lecturer of Commerce
Sree Kerala Varma College,
Thrissur, Kerala, India
Correspondence
Sreeja ES
Guest Lecturer of Commerce
Sree Kerala Varma College,
Thrissur, Kerala, India
A study on service quality of co-operative banks with
special reference to Thrissur District
Sreeja ES
Abstract
Commercial banks are playing important role in the Indian Financial System and also the well-being of
rural people. These banks are providing loans to rural people for their economic stability. The
relationship between service quality and customer satisfaction has a direct impact. The results of most
research studies reveal that service quality and customer satisfaction are indeed independent but are
closely related. The service sector has tremendous development due to their differentiate service. In
order to retain customers the organization wants to provide facilities. For this purpose the organization
treat their existing customers in a better way than finding new customers. Customers are always taking
the service with a lot of expectation. These expectations can meet by the organization by providing
quality services with personal consideration. The importance of service quality has been increased in
these recent years some5times there may be difference between customer’s expectation and actual
perception. The cooperative banks also contribute to the development of nation. A number of products
and service offered by cooperative banks. The important products offered by the cooperative bank
include deposit and loans. The deposits are again classified in to S.B account, Current Account,
Recurring deposits, fixed deposits and cash certificates. The loans include loan to salaried employees,
housing loans, educational loans, loan of physically challenged persons. Service include clearing, safe
deposit locker, ATM, Demand Draft /Pay Order. In this study the service quality of cooperative banks
at Thrissur District by taking customers samples. The study is descriptive in nature. Both primary and
secondary data are collected for measuring service quality. SERVQUAL tool is used for this purpose.
Reliability, Responsiveness, Assurance, Empathy and Tangibility were five dimensions considered for
the study
Keywords: Service quality, cooperative banks, service quality and customer loyalty of cooperative
banks and dimensions of service quality
Introduction
From the viewpoint of business administration, service quality The basic objective of every
type of organization is to increase the profit by increasing the net revenue and by reducing
cost. Now a day’s customer satisfaction is one of the important factors which influence the
return on an organization. Enhancement of customer satisfaction leads to customer loyalty.
Keeping good relationship with customers is an easy way for capturing competitive markets.
Service sector of Indian economy has tremendous development because of their services.
Banking industry especially co-operative banks is not an exempted service sector from this.
A number of cooperative banks are entered in to this sector with high level of products and
services. In order to compete in this sector, cooperative banks have to more changes in their
practices. Customer satisfaction is an important factor for every bank to retain their
customers. Customer satisfaction means the attitudinal response of customers towards the
functioning of their products and services.
Cooperative banks in India have become an integral part of the success of the success of
Indian Financial Inclusion story. They have achieved many land marks since their creation
and have helped a normal rural Indian to feel empowered and secure. The important features
of cooperative banks are customer owned, democratic structures, profits are mainly pooled to
form reserves while some amount is distributed to members, involved in community
development foster financial inclusion by brining banking ton the doorstep of the lowest
segment of society. Thus cooperative banks are an important part of the Indian Financial
System. They comprise urban cooperative banks and rural cooperative credit institutions.
Cooperative banks in India have a history of more than 100 years old.
~ 1 ~ 
International Journal of Applied Research
Cooperative banks constitute an important segment of the
Indian banking system. They have an extensive branch
network and reach out to people in remote areas. They have
traditionally played an important role in creating banking
habits among the lower and middle income groups and
strengthen the rural delivery system
Cooperative bank is financial entities which belongs to its
members, who are same time the owners and the customers
of their banks. These banks generally provide their members
with a wide range of banking and financial services. They
are differing from stake holder’s bank by their organization,
their goals, values and governance.
Cooperative Banks in India
Cooperative banks in India have become an integral part of
the success of Indian Financial Inclusion story. They have
achieved many land marks since their creation and have
helped normal rural Indian to feel Empowered and secure.
Cooperative banks in India have a history of almost 100
years. Cooperative banks are registered under the
Cooperative Societies Act. These banks are also regulated
by the RBI and governed by the Banking Regulation Act
1949 and Banking Laws Cooperative Societies Act 1955.
The need for cooperative banks in India is much important
to support the financial requirements of people. In order to
provide much established support to every person in the
country and for the development of the nation, cooperative
banks are categorized at various dimensions and at various
levels. The major strengths of cooperative banks are their
local reach, transparent interaction with the customers and
their efficient services to common people. It functions with
the no profit and loss model. As the other banks in India
cooperative banks perform all the basic banking functions
look borrowing and lending credits. Thus cooperative banks
are deeply rooted inside local areas and communities. They
are involved in local development and contribute to
sustainable development of communities, as their members
and management board usually belongs to communities in
which they exercise their activities
The cooperative banks can be divided in to two categories
based on their functions. They are,
1. Long -Term Cooperative Credit Institutions
 State Level
 District Level
 Village Level
2. Short- Term Cooperative Credit Institutions
 State cooperative Banks
 District Cooperative banks
 Primary Agricultural Cooperative Societies
Cooperative banks in India finance rural areas under:
 Farming
 Cattle
 Milk
 Hatchery
 Personal Finance
Cooperative Banks in India finance urban areas under:
 Self-Employment
 Industries
 Small Scale Units
 Home Finance
 Personal Finance
 Consumer Finance
~ 2 ~ 
Service quality in banking sector is the most important
criteria. It helps to evaluating and satisfying customers and
there by increases the customer loyalty and average
retention of customers. Among service quality determinants
reliability, assurance and empathy have always played a
pivotal role.
Significance of study
Now days a lot of cooperative banks are entered in to our
service sector. Cooperative societies provide a number of
services but with different qualities. Quality is an important
factor for surviving in the competitive market. Customers
are entering into cooperative banks with lot of expectations
especially customers in rural areas. Sometimes the
expectations are fulfill otherwise it is not possible. So this
study is an attempt to analyses the expectation and actual
perseverance of different customers and also for
understanding is there any gap or mismatch between the
expectations and actual perseverance of customers of
cooperative banks at Thrissur district
Statement of the problem
The banking industry is undergone rapid changes, followed
by a series of fundamental developments due to
liberalization and deregulation of trends. Quality is the
important factor which leads to development banks. A lot of
recent services are improving the satisfaction of customers.
Especially rural customers are entering in to cooperative
banks with lot of expectation. These expectations are
fulfilled by cooperative banks. Sometimes there may be
success or failure. So this study is an attempt to understand
the quality of cooperative banks in Thrissur District
Objectives of the study
 To understand the socio-demographic conditions of
customers
 To determine the different dimensions of service quality
 To evaluate the service quality of cooperative banks in
Thrissur District
Research Methodology
This study includes both primary and secondary data.
Primary data collected from 70 customers of cooperative
bank of Thrissur District. A structured schedule is used for
collecting information from information. Three cooperative
banks in Thrissur district are selected for data collection.
The data collected from customers who visit the bank during
the data collection. The objective of the study is explained
to customers for their cooperation it was a free talk between
them. Secondary data were collected from different books,
journals and various websites.
Tools used
Mathematical and statistical tools are like percentage, mean
score etc. were used for data analysis. Mainly the mean
score of different statements of five dimensions were
computed for measuring the service quality.
Dimension of service quality
The service quality of co-operative banks was determined
by using SERVQUAL tool of Parasuraman. It includes five
dimensions Reliability, Responsiveness, Assurance,
Empathy, and Tangibility.
International Journal of Applied Research
 

Data Analysis

Table 1: Socio-Demographic data of customers

Variables Category Number Percentage
Male 38 54
Gender
Female 32 46
20-30 5 8
30-40 18 26
Age 40-50 22 31
50-60 15 21
Above 60 10 14
Illiterate 4 6
S.S.L.C 30 43
Educational Qualification Secondary Education 22 31
Higher Education 8 13
Professional Education 6 9
Urban 23 33
Residence
Rural 47 67
Very Bad 2 3
Bad 7 10
Overall Service Quality Average 9 13
Good 32 46
Very Good 20 28

Table No1 shows the demographic profile of customers.
When analyzing it is clear that 38% of customers are female
and 32 % are male. 31 % customers are included under the
age category of 40-50. Only 5% included under 20-30.
Majority of customers have S.S.L.C. education (36%) and a
little percentage carried out degree or more education. 67%
of customers are included under rural category and rest in
urban category. When analyzing overall service quality 46%
of respondents said that service quality is good; and only 3%
admitted very bad.

Table 2: Identification of 25 dimensions in five dimensions and measurement of service Quality

Dimensions Mean Perception Mean Expectation Mean Quality Gap
Reliability 4.15 4.30 -0.15
Performs service at right time 4.24 4.43 -0.19
Maintaining error free records 4.14 4.26 -0.12
Wide range of products and services provided 4.03 4.28 -0.25
Security on transactions 4.17 4.24 -0.07
Overdraft privilege on current accounts 4.15 4.31 -0.16
Responsiveness 4.10 4.22 -0.12
Always willing to help 4.09 4.27 -0.18
Never too busy to respond to queries 4.00 4.14 -0.14
Knowledge of customers business and Willingness to help 4.16 4.30 -0.14
Availability of credits and favorable credits 4.05 4.12 -0.07
Fast and efficient counter services 4.18 4.27 -0.09
Assurance 3.92 4.23 -0.31
Have the knowledge to answer the questions 3.91 4.22 -0.31
Politeness and friendly staff 4.00 4.21 -0.21
Gives individual attention 3.90 4.29 -0.39
Provision for financial advise 3.91 4.24 -0.33
Ease of access to account information 3.90 4.17 -0.27
Empathy 4.01 4.25 -0.24
Understand specific needs 4.01 4.28 -0.27
Lower service charge 4.12 4.21 -0.09
Confidentiality of bank 3.84 4.23 -0.39
Products and service profitability 3.99 4.23 -0.24
Convenient operating hours to all its customers 3.84 4.23 -0.39
Tangibility 4.17 4.24 -0.07
Modern looking equipment 4.15 4.28 -0.13
Physical facilities are usually appearing 4.00 4.15 -0.15
Employees are well groomed 4.19 4.28 -0.09
Counter partition in banks and its branches 4.16 4.20 -0.04
Speed and efficiency in transactions 4.18 4.27 -0.09

For measuring the service quality 25 statements under 5 purpose the expected mean score and perceived mean score
dimension where considered such as reliability, of these statements were calculated. And the difference of
responsiveness, assurance, empathy, tangibility. for this these two scores was found for calculating the quality gaps
~ 3 ~ 
International Journal of Applied Research
 

score. The mean expectation scores are very high and it is
ranged from 4.12-4.31. The highest expectation was related
to overdraft to current accounts, lower service charge,
knowledge of customers business and willingness to help
etc. the lowest expectation is related to the availability of
credit on favorable terms.
The mean perception score was ranged from 3.84 to 4.24.
The highest perception score was related to reliability
dimensions (performs service at right time) and the lowest
perception score was related to empathy dimension on
convenient operating has all its customers.
When analyzing the quality gap scores for it is clear that the
expectations of actual perception of all five dimension and
25 statements are statistically different. Hence, there is a gap
between the customers’ perception and expectation of
service quality of different cooperative banks. The highest
gap of the quality related to assurance dimension with the
gap score of 0.31 and the lowest gap score of the quality
related to dimension of tangibility, with gap score 0.07.
Findings
 It is found that 54% of customers are Males and 46%
are females.
 Majority of customers were included under 40 – 50 age
category
 Most of customers have only S.S.L.C education and a
little percentage had degree and more education
 67 % of customers were come from rural area and rest
were from urban area
 46 % were admitted that overall service quality was
good
 By analyzing service quality it is understood that the
expectation and the actual perception of customers are
different.
 There is gap between perception mean score and
expectation mean score.
 Quality gap was more in assurance dimension and less
in tangibility dimension
References
1. Akviran K Necuni. Developing an instrument to
measure customer service quality in branch banking”,
International Journal of Bank Marketing, 1994;
12(6):10-18.
2. Beniamin Schneider, Susan S White Service Quality –
Research Perspective. 2004.
3. Buttle F. SERVQUAL: review, Critique, research
agenda, European Journal of marketing, 1996; 30(1):8-
32
4. Carman JM. Customer Perception of service Quality:
An assessment of the SERVIQUAL Dimensions
Journal of Retailing. 1990.
5. Cooperative Banks in India-Functioning and Reforms
by Amit Bhasak.
6. Cronin JJ, Taylor SA. Measuring service quality: A
reexamination and extension J Market. 1992; 56:55-68
7. Parasuraman A, Zenithaml VA, Berry LL. A
Conceptual model of service quality and its implication
for future research. Journal of marketing. 1985; 49:48-
50.
8. Siami S, Gorji M. The measurement using SERVQUAL
and Quality gap model Indian Journal of Science and
Technology. 2012; 5(1):1956-1960.

Conclusion
Now a days it is clear that cooperative banks have very
much importance for national development. They are active
part in local communities with stronger commitments and
social responsibilities. The SERVQUAL was useful for
analyzing the service quality. It helped to evaluate and
monitor various dimensions of statements. The customers
especially from rural areas were come to co-operative banks
with lot of expectations. The expectation and the actual
perception of customers were different and a mismatch is
existed between these two points. The quality gap was more
on assurance dimension and it was less in tangibility
dimension. The cooperative banks must take care for
improving service quality. Otherwise the level of
satisfaction will reduce it will affect the future growth of co-
operative banks. In the service sector delivering of high
quality service has been recognized as a critical factor for
developing and maintaining long term and satisfying
relationship with customers. In terms of customer- bank
relation cooperative banks tend to foster a consciousness
and unconsciousness feeling of cognitive trust among
customers and anticipate a perception of being fair and more
honest institution’s compared with other banks.

~ 4 ~